Poor Lao farmers pin hopes on hydropower

Nakai Plateau, Laos: Three houses remain in this village where 100 families once lived and the scrubby forest is already beginning to reclaim the abandoned land. The other households have moved to a new village built from scratch.

Siang Song, a rice farmer, is about to join the exodus. A pinewood house and a plot within a paddy field await his family of nine. Like the others, Mr Song plans to demolish his old house and haul the timber to the new site. With assistance from the government, my poverty should be reduced, he says.

Thats the promise held out by the developers of a giant hydroelectric dam on Nam Theun River, a tributary of the Mekong, that is slated to begin construction here next year. In the works for more than a decade, the Nam Theun 2 dam is designed to deliver 1,000 megawatts of renewable energy to Laos and Thailand, and earn much-needed currency for Laos, one of Asias poorest countries.

For power-hungry Asia the race to find alternative energy sources has taken on added urgency with the recent surge in oil prices. Half of all the crude oil shipped from the Middle East goes to Asia, and its appetite is growing.

Chinas oil consumption alone is now close to 70 percent of the combined usage of Europes four largest economies: Britain, Germany, France, and Italy. Malaysian Deputy Prime Minister Najib Razak said at a regional oil conference in June that oil usage by developing countries in Asia is growing more than three times faster than in industrialized economies.

At the same time, air pollution in urban centers has highlighted the need for clean power sources. The 10 members of the Association of Southeast Asian Nations have agreed to a target of boosting renewable sources of energy to 10 percent of total power generation by 2010.

While Japan and South Korea have turned to nuclear power, Southeast Asia is looking to natural gas and hydroelectric dams. Experts say waterways like the Mekong River could help slake Southeast Asias rising thirst for power.

But hydroelectric power comes at a cost and opponents say the cost is usually borne by farmers like Song, who are uprooted from their traditional lives. He is among 5,700 subsistence farmers living on the Nakai plateau in southern Laos who would be moved to make way for a reservoir roughly the size of Singapore.The impact will also be felt by around 40,000 people living downstream of the dam where the increased water flow will flood riverbed crops.

On a recent afternoon, villagers in groups of 10 studied hand-drawn diagrams explaining the workings of the dam and how to seek redress from the developers for future losses. Anek Nakabutara, an independent facilitator, says most are receptive to the idea of the dam, though they worry what it will mean for their sleepy village.

The Thai-French consortium behind the dam says the power generated would improve the lives of farmers who eke out a precarious living from slash and burn cultivation around Nakai plateau. Laos officials say the money earned from selling power to Thailand would help fund a national antipoverty program.

But these arguments have yet to convince the World Bank and other agencies to back the $1.1 billion project. World Bank officials say they need to weigh all social and environmental costs before making a decision later this year.

Anti-dam campaigners dispute the economic rationale for building the dam, saying the promise of cheap electricity is an illusion. Witoon Permpongsacharoen, a Bangkok-based environmentalist, says developers are sweetening the deal with low tariffs that will result in cutbacks in compensation paid to local communities.